ByIlene R. Prusher, Staff writerJune 9, 2009

Jerusalem — US special envoy George Mitchell arrived here Tuesday, poised to fast-forward President Barack Obama's plan for change in the Middle East. But due to Israeli resistance to a key facet of that plan – freezing West Bank settlement growth – Mr. Mitchell's trip is looking likely to be a diplomatic marathon, requiring the patient persistence he cultivated in Northern Ireland.

Adding to the controversy, Mr. Netanyahu's interior minister, Eli Yishai, has vowed to reverse official "discrimination" against the 120-odd settlements and to allocate his ministry's reserve funds to their benefit, according a Monday report in the Haaretz newspaper.

"[Mr. Yishai] will do everything he can do to help the growth of communities in Judea and Samaria," says Roei Lachmanovich, Yishai's adviser, using the biblical names for part of the West Bank. Mr. Lachmanovich confirmed the Haaretz report as accurate.

All of this is occurs against the backdrop of increasing tensions between Washington and Jerusalem, most notably on the settlement issue. Mr. Obama bypassed Israel on his recent trip to Cairo, where he declared in a major speech to the Muslim world that the US could not accept the "legitimacy" of continued Israeli settlements – a point underscored repeatedly over the past two weeks by other administration officials, including Secretary of State Hillary Rodham Clinton. Netanyahu has promised to respond to Obama's Cairo speech in a major address of his own this Sunday. [Editor's note:The original version misrepresented Obama's view on existing settlements.]

Mitchell, in Jerusalem on Tuesday, sought to assuage Israeli concerns that the firmer stance of this administration on certain issues signaled a deterioration of ties.

"Let me be clear. These are not disagreements among adversaries. The United States and Israel are and will remain close allies and friends," said Mitchell, a day after calling for "immediate" peace talks between the Palestinians and Israel.

Netanyahu's office has been pointing to an agreement that previous Israeli prime ministers had with the White House regarding settlement growth. They cite former prime minister Ariel Sharon having received a "Bush letter" – US officials say it was a verbal "understanding" – that indicated that the Bush administration would not take issue with growth in major "settlement blocs." Such blocs or "sleeves" contain groups of populated settlements that are relatively close to the Green Line – Israel's pre-1967 border.

Over the past decade, negotiators have indicated that these could be annexed to Israel in a final peace agreement, in exchange for Israel giving Palestinians territory elsewhere. This concept focused on the ideal of Israel uprooting fewer settlers in a two-state peace deal – dismantling mostly isolated settlements with fewer people in them – and therefore making a peace deal more palatable to the Israeli electorate.

But what seemed good enough for George W. Bush is not acceptable to Barack Obama. Secretary Clinton on Sunday firmly disavowed any "understandings" between Mr. Bush and his Israeli counterparts, saying the Obama administration is bound only by written agreements. The 2003 road map, which Israel agreed to, calls for a halt to settlement growth.

"There is no memorialization of any informal and oral agreements," Clinton said Friday. "If they did occur, which of course, people say they did, they did not become part of the official position of the United States government."

'Any construction ... is counterproductive'

Netanyahu's office is focused on trying to find ways to get back to the agreement it says was reached in Bush's 2004 letter, while Sharon was planning the disengagement from Gaza.

"Our goal now is to again reach understanding on these important issues," said an Israeli official who asked not to be named.

Over recent weeks, various officials from Netanyahu's government have been trying to get the Obama administration to agree that the freeze not include the larger blocs and for there to be an "exceptions committee."

Ori Nir, the spokesman for Americans for Peace Now, says that there is wisdom in the Obama administration saying no to such an arrangement.

"Our opinion is supportive of Obama's interpretation of the road map, and that is, a freeze is a freeze," Mr. Nir says. "A total freeze applies to everything, pending a final settlement of the conflict which will determine what Israel annexes.

"In this period, any construction – even in places that Israel thinks it may retain – is destructive. It's counterproductive. It sends a horrible message to the Palestinians and the Arab world, and it doesn't give people hope that Israel will uphold its part of the road map."

At a meeting with Israel's ceremonial president, Shimon Peres, Mitchell reiterated that the US is committed to Israel's security, and put US demands in a regional context.

"We are working hard to achieve the objective of comprehensive peace in the Middle East ... including a Palestinian state, side by side in peace and security with the Jewish state of Israel," he said.